diff --git a/ch03.asciidoc b/ch03.asciidoc index e2c8632..9fd3b0d 100644 --- a/ch03.asciidoc +++ b/ch03.asciidoc @@ -563,6 +563,24 @@ In contrast, Alice will not open a channel to someone unknown in a foreign count While the Lightning Network is built on top of Bitcoin and inherits many of its features and properties, there are important differences that users of both networks need to be aware of. +==== Addresses vs Invoices, Transactions vs Payments + +Bitcoin and Lightning have different terminology. +In Bitcoin, a typical operation is that a user receives a Bitcoin address (e.g. he reads it on a webpage, or he received it in an instant message from a friend). +He then uses his Bitcoin wallet to create a transaction to send funds to this address. + +In the Lightning Network all starts at the payee. +The payee creates an invoice. +A Lightning "invoice" could be seen as an analogy to a Bitcoin "address". +The payee provides the Lightning invoice to the payer. +This is similar to Bitcoin, the payee places it on the webpage at checkout, or the payee is a friend and sends it via instant message or email. +The payer uses his Lightning wallet to make the invoice payment (e.g. by scanning a QR code). +In Lightning, "payment" is the analog term for a Bitcoin "transaction". + +Along the same lines, in Lightning some users prefer to use "payer" and "payee" to what Bitcoin often refers to as "sender" and "receiver". +This is merely a matter of convention. +These terms just underline that Lightning is a very specific network, it is a "payment" network. + ==== Selecting Outputs vs Finding a Path In order to make a payment on the Bitcoin network, a sender needs to consume one or more Unspent Transaction Outputs (UTXOs).